ICFM/26-99/PIL/D

 

REPORT OF THE SECRETARY GENERAL

ON

“THE CRITICAL ECONOMIC SITUATION IN AFRICA”

TO THE TWENTY-SIXTH SESSION OF THE ISLAMIC CONFERENCE OF FOREIGN MINISTERS

OUAGADOUGOU – BURKINA FASO, 28 JUNE – 1 JULY 1999

 

The challenges faced in the socio-economic development in Africa are linked with complex internal and external factors. These challenges are characterized by the impediment which include the debt burden, high interest rates, depressed commodity prices, structural deficiency and inadequate external financial resources for economic growth, sustained development and self-sufficiency. The lack of adequate human resources development and transfer of technological know-how from the developed countries has constrained Africa’s growth and development. Other compounding factors include, inter-alia, drought, desertification and natural catastrophes.

  1. The economic and social conditions in Africa particularly in the Sub-Saharan region have continued to deteriorate. Sub-Saharan Africa, where almost 40 million people are facing hunger, need an emergency food assistance. Southern and East African countries are facing severe drought. The acute food shortages are in some cases not only the result of climatic aberration but also the result of human conflicts and internal strife particularly in Somalia and elsewhere in the Horn of Africa. Moreover, the political and social upheavals are to some extent a reflection of the grim economic realities, which have caused immense suffering and misery.
  2. In order to surmount these problems, the African leaders manifested their firm determination to make efforts for bringing about structural reforms and economic diversification. This was clearly reflected in the adoption, by the OAU Summit Conference, of the program determining priorities for the economic recovery of Africa for the perio9d 1986-1990. Thus the African leaders undertook to embark on a process for comprehensive reorientation of their economies and to initiate priority programmes for economic recovery.
  3. The Special Session of the UN General Assembly in 1986 accorded full support to the programmes for economic recovery of Africa and a global strategy was worked out. However, despite the structural adjustment programmes and concerted efforts undertaken by African countries and the international community, the situation has not yet improved. The development crisis still plagues the African continent.
  4. The critical economic situation in Africa has been a matter of concern to the Organization of the Islamic Conference. It has been the subject of close review by the various Islamic Conferences including the OIC Annual Coordination Meetings of Foreign Ministers held at the United Nations concurrently with the session of the UN General Assembly.
  5. The Islamic Conferences expressed their concern over the critical economic situation in Africa and adopted several resolutions expressing full support of the Islamic Ummah to the recommendations of the United Nations Plan for the Economic Recovery and Development of Africa (1986/1990) adopted in 1986 by the Special Session of the United Nations General Assembly.
  6. The Twenty-Fifth Ordinary Session of the OAU Heads of State and Government, held in July 1989 at Addis Ababa (Ethiopia) especially urged the creditor countries to write off the public debt due to them by African countries in view of the general poverty linked to the fragile and obsolete structures of their economies and to their low per capita income which places them amongst the so-called low income countries seriously affected by the debt problem.
  7. The same Conference recommended the establishment of an international institution or agency for debt-repurchase under the auspices of the International Monetary Fund (IMF) and the World Bank, to repurchase, at highly favourable market discount rates, the debts which African States owe to Commercial Banks, the discounts thus obtained to be paid to the debtors. The Conference also urged creditors to adopt urgently, necessary measures for the reduction of the interest rates in order to avoid any increase in the volume of debt.
  8. The French President announced on 21st June 1990 at the Summit of France and Africa, held in Baule (France), his Government’s decision to write off the debts of poor African countries, and to give grants instead of loans to those countries and to limit the rate of interest for medium income African countries to 5%, a measure which is to be applied for future loans as well as for those outstanding.
  9. The U.N. General Assembly adopted on 19 December 1990 Resolution 45/178 on the critical economic situation in Africa. The General Assembly, inter alia, decided to establish an Ad Hoc-Committee-of-the-Whole of the 45th Session of the General Assembly for the purpose of preparing, for the 46th Session, the final review and appraisal of the implementation of the U.N. Programme of Action for African Economic Recovery and Development 1986-90. It mandated the Ad Hoc Committee to propose concrete measures and recommendations for sustained land sustainable growth and development in Africa beyond 1991.
  10. Realising the gravity of the problem of external indebtedness, the Chairman of the Fifth Islamic Summit Conference, the Emir of the State of Kuwait, His Highness Sheikh Jaber Al Ahmed Al Jaber Al Sabah, at the 43rd Session of the United Nations General Assembly in 1988 had outlined a three-point plan of action. This plan envisaged that creditor nations examine the question of writing off the interest due on their loans to the debtor countries. The International Monetary Fund and the World Bank should reconsider their stringent conditions for States seeking development assistance from them. This calls for amendments introducing greater flexibility and taking into account humanitarian factors to suit conditions prevailing in debtor nations expansion and regulation of North-South scientific and technical assistance including human resources development and use of science as a tool for rehabilitation, construction and progress rather than as an instrument of destruction and decadence.
  11. In an address to the 45th Session of the UN General Assembly in 1990, His Highness again pointed out the magnitude of the problem of foreign debts which continues to pose a grave threat to the lives of millions of human beings, a threat that in all likelihood may undermine world peace and stability. While announcing that Kuwait has decided to write off all interests on its loans, His Highness Sheikh Jaber Al Ahmed Al Jaber Al Sabah, called upon the international community to make tangible headway towards an effective solution to the debt problem in the interest of all mankind. In this context, he invited attention to the conclusions of the United Nations-sponsored Conference on the Problems of the Least Developed Countries held in Paris in 1990.
  12. In the framework of his follow up of, and interest in, the subject of the critical economic situation in Africa, the Secretary General continued to urge the international community and especially the Member States to intensify their efforts to seek solution to the problem of the debts of the Third World countries and for alleviating the sufferings and numerous difficulties faced especially by the Muslim African States.
  13. In a pertinent analysis, the U.N. Secretary General on 3 September 1991 stated that the economic situation of most African countries today, particularly those of the Sudan-Sahelian region, belies the optimism that was generated when the Programme was adopted. Over the last five years, economic and social conditions in Africa actually deteriorated. Although economic output grew, on average, by 2.3 per cent in real terms, gross domestic product (GDP) in per capita terms fell by 0.7 per cent. African debt grew from slightly over $ 200 billion in 1986 to over % 270 billion in 1990. In terms of export earnings, the servicing of debt consumed over 30 per cent of scarce resources which could otherwise have been used to support Africa’s development efforts.
  14. Although official development assistance (ODA) increased in nominal and real terms over the period, falling commodity prices, particularly raw materials on which nine out of 10 African countries depend for their exports, cost Africa a total of $ 50 billion from 1986 to 1990. If one adds to that a debt servicing burden of approximately $ 21 billion a year, the result was a decrease of overall net resources flows to Africa. Moreover, the deteriorating economic situation has had an extremely adverse impact on the human condition, and declines have been registered in health, education, nutrition, employment and incomes. The goal in 1986 to reverse economic decline and institute sustainable recovery in Africa by 1991 has not been achieved.
  15. In New York, the Secretary General has indicated that the process of Africa’s recovery and development requires a greater effort and a stronger commitment on the part of African countries, as well as their partners in the agreement and over a sustained period, if Africa is to be se t firmly on the road to sustainable economic development, and that African countries must seek to achieve at least a 6 per cent annual growth rate. This would mean that development assistance should be increased to $ 30 billion by 1992, and then grow at the rate of 4 per cent annually until the year 2000. The Secretary General stated that, to help attain those targets, it will be necessary to organize smaller, open-ended partnerships or "alliances among individual African States or groups of States and their chosen development partners, in order to define goals and reinforce national efforts to achieve them. The General Assembly, for its part, may also wish to promote and monitor the implementation of a new global compact for Africa through appropriate inter-governmental mechanisms.

  16. In its Resolution 46/151 on the final review and appraisal of the implementation of the United Nations Programme of Action for African Economic Recovery and Development 1986-1990, the U.N. General Assembly adopted the conclusion of the Ad-Hoc Committee on the subject consisting of assessment of the implementation of the Programme of Action and the United Nations New Agenda for the Development of Africa in the 1990’s.
  17. The U.N’s New Agenda for the Development of Africa in the 1990 has recognized that "Africa’s development is primarily the responsibility of Africans. The international community accepts the principle of shared responsibility and full partnership with Africa and therefore commits itself to giving full and tangible support tot the African efforts." It sets an average real growth rate of at least 6% per annum throughout the period as a desirable objective in order for the continent ot achieve sustained and sustainable economic growth and equitable development, increase income and eradicate poverty. The New Agenda has, as its priority objectives, the growth of the African economies, in order to strengthen them within the world economy, reduce their vulnerability to external shocks and increase their dynamism, internalize the process of development and enhance self-reliance. It also gives special attention to human development and increased productive employment and promotes rapid progress towards achievement of human-oriented goal by the year 2000 in the areas of life expectancy, integration of women in development, child and maternal mortality, nutrition, health, water and sanitation, basic education and shelter.
  18. Recognizing the magnitude of Africa’s debt problem, the measures envisaged by this New Agenda could include cancellation or reduction of ODA debt and debt service; additional relief for official bilateral debt or debt services to work towards a grant-oriented solution of problems of African developing countries; early implementation of the IMF quota increase under the Ninth General Review and the associated Third Amendment to the Charter.
  19. The international community has also reaffirmed its commitment to work in order to attain the accepted U.N. targets of devoting 0.7% of GNP to ODA as well as the agreed targets established at the Second UN Conference on the Least Developed countries. It would introduce measures and devise programmes to encourage direct foreign investment in African countries and support policy changes undertaken by African countries to attract foreign investment. The new Agenda states that diversification is a strategic short and long term conclusion to severe commodity problem in Africa. The international community commits itself to correct imperfections in commodity markets. It also recognizes the importance of compensatory financing. It notes the proposal that an African diversification fund should e established. The Agenda commits the international community to a substantial reduction in removal of tariff and non-tariff barriers affecting African exports. It also emphasizes the importance of early balanced and successful conclusion of the Uruguay Round.

  20. Arrangements had been made by the UN General Assembly for the evaluation and monitoring of the U.N. Agenda for the Development of Africa in 1990’s.
  21. The 8th Islamic Summit Conference held in Tehran in December 1997 reaffirmed all the relevant resolutions adopted by Islamic Conferences at all levels and welcomed the efforts made by African countries to ensure economic recovery and development in accordance with the 1991Abuja Accord which established the African Economic Group aimed at gradually bringing about progressive economic integration in Africa. The Conference stressed the importance of implementing the New Agenda for the development of Africa in the 1990’s, and invited the international community to carry out its commitments on the basis of joint responsibility and full partnership with Africa.
  22. The U.N. General Assembly adopted on 23 December 1993 Resolution 48/214 on UN New Agenda for Development of Africa in the 1990’s by which it, inter alia, reaffirmed the high priority it attaches to Africa’s economic recovery and development including the effective implementation of the UN’s New Agenda for Development of Africa. It decided to address rigorously the full range of issues related to the diversification of African economies and urged the international community to increase financial resource flows to Africa; to address Africa’s external debt crises including proposal for convening an international Conference on Africa’s external indebtedness; to implement the undertaking of devoting 0.7% of GNP to official development assistance and 0.15% to least developed countries as soon as possible. It also urged African states to continue their efforts for the improvement of investment climate.
  23. The Secretary General hopes that the international community particularly the developed countries will extend their fullest support to African countries for the implementation of the New Agenda for the Development of Africa in the 1990’s adopted by the UN General Assembly. In this regard, the fulfillment of the commitments by the international community towards sustained growth and development of this continent are of paramount importance.
  24. The Secretary General wishes to express his appreciation for the efforts being made by the Islamic Development Bank to assist the Member African States and encourages pursuance and strengthening of these efforts for the economic and social progress of the Muslim African peoples. The Secretary General also urges all Member States to continue to support the efforts of the African countries to overcome the critical economic situation in Africa.
  25. In this context, the Secretary General notes with appreciation the previous contribution to the development of the Islamic World of several OIC Member States which have granted to other members easy term loans through the national and regional financial institutions. These include:
  26. Islamic Development Bank (IDB), OPEC Fund for International Development (OPEC Fund), Arab Fund for Economic and Social Development (Arab Fund), Arab Bank for Economic Development in Africa (BADEA), Abu Dhabi Fund for Arab Economic Development (Abu Dhabi Fund), Kuwait Fund for Arab Economic Development (Kuwait Fund), Saudi Fund for Development (Saudi Fund).

  27. It is worth mentioning that cumulative financing accorded by these Funds have amounted to US$ 28.9 billion between 1962 and 1989 and that an important portion – more than 82 per cent – of these financing operations are directed to the OIC Member States.
  28. In the light of the proposals made by His Highness Sheikh Jabar Al Ahmad Al Jabar Al Sabah, the Emir of Kuwait at the United Nations and in accordance with the relevant decisions adopted by the Sixth Islamic Summit Conference, the Secretary General urges the international community and especially the Member States to intensify their efforts to seek solution to the problem of the debts of the Third World countries and for alleviating the sufferings and numerous difficulties faced especially by the Muslim African States.
  29. The Secretary General warmly welcomes the generous decision of the Custodian of the Two Holy Mosques king Fahd Ibn Abdul Aziz, to write off public debts due by some Member States to the Kingdom of Saudi Arabia.
  30. The Secretary General submits this Report to the Twenty-Sixth Session of the Islamic Conference of Foreign Ministers for consideration and appropriate decision.

 

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